What I'd do:
1. Ask you friend what he'd like his ACCOUNT NAME to be. Make sure you get it right, this can't be changed afterwards.
2. Once you have that info, create a NEW account with
- his account name (which you agreed on)
- a password you create and will give to him (he can change it later)
MAKE SURE IT HAS ADMINISTRATIVE PRIVILEGES.
Just create a username and password for now. Let him set the rest of it up on his own.
3. Then, LOG OUT of YOUR account and log into the NEW account
4. Now, DELETE your account. Don't "archive" it... DELETE it.
5. Next, you will probably want to "manually delete" any of your documents that were stored "outside of" your former home folder.
6. Also, you may want to delete some of your 3rd-party apps (other than the Apple apps). Or... just leave them there. Remember, that your specific app preferences are "wiped away" when you deleted your home folder. So when he runs those apps he will create his own new preferences.
7. I don't remember if the older versions of disk utility permit you to erase "the free space" on the drive (without erasing things that were installed). If it does, you could use a "1-pass" to wipe the free space.
There are some 3rd-party utilities, such as "Drive Genius" that will do this (see the "shred" option). You may be able to scrounge up an old copy if you don't already have it.
Doing all this will get it "about as clean as you can get" without booting from another drive and using disk utility to erase the entire drive with a "secure erase" option. This would do the same thing as above... use the option to write zeros in all the blocks of the drive. But you do that with the "free space erase" anyway.